Fairness Moyana

Zambezi Gas and Coal Mine has begun investing in the acquisition of equipment as it resorted to own mining to contain  costs associated with using contractors.

The coal mining concern recently bought four 150 tonnes dump trucks and an assortment of machinery through a loan facility as it moved to take charge of production.

Since it’s establishment in 2002, the company has engaged contractors mostly reputable companies from South Africa who demand payment in forex.

One of the company’s directors, Mr Linos Masimura told Zim Mining in an interview that limited access to foreign currency coupled with the contractor mark-up matrix had drove it to disengage the services of contractors in its mining operations.

“Production went well last year though it was not up to plan due to shortage of foreign currency while the market was difficult. We passed through a phase were it became difficult for us to to contract. We had to go own mining to try and contain the costs. We actually have machines belonging to the company now which we acquired on a credit facility which we really hope we will be able to get enough forex to service,” said Masimura.

He said they were working towards acquiring more equipment which also largely fell on the capacity to service the loan in order to open up more credit lines.

“We expect to get the other third of our equipment as soon as we service our loan. We have been trusted by the banks to access the machines. The challenge is for us to service these credit facilities to a point where we will be able to get more machines in the future. We are confident that in 2022 we should be able to continue to grow.”

The company’s operations manager, Engineer Menard Makota weighed in arguing that the cost involved in production given the raging parallel market made mining activities unstable.

“We need 100 percent foreign currency to purchase fuel, explosives, spare parts and equipment. Since we don’t access the required amount on the auction system we are forced to resort to the parallel market. This is why we had to opt for own mining because we realised as much as contracted is efficient the contractor also needs a mark up and we had to swallow that by getting our own equipment.”

He said while the auction system was assisting in raising foreign currency the funds were not enough and faced delays in disbursements forcing them to resort to the parallel market to fund operations.

Eng. Makota said their viability was affected by forex shortages while the bemoaning the retention rate.

“Our challenge has to do with availability of foreign currency. As an enabler in the economy we feel that we should be given all leeway on access to foreign currency and its availability when we definitely need it. Viability of coal miners is quite important and with involvement of government we are able to get there.”

The company has now pinned its hope on expanding its export market which currently stands at 30 percent. It exports industrial coal and coal fines to DRC and Zambia for the manufacturing and construction industry.